Allstate must face privacy lawsuit over cellphone tracking of drivers

By Jonathan Stempel

March 4 (Reuters) - Allstate must face a privacy lawsuit accusing the home and auto insurer of illegally tracking ‌drivers through their cellphones without consent, using their data to ‌raise premiums or deny coverage, and selling the data to other insurers.

In a decision on ​Tuesday, U.S. District Judge Jeremy Daniel in Chicago said drivers in the proposed class action can try to prove that Allstate violated the Federal Wiretap Act by monitoring their travel locations, trip distances, speed, acceleration, braking, ‌phone usage and attention ⁠to the road, and tried to monetize that data to boost profit.

Drivers can also try to show that ⁠Allstate's data analytics unit Arity violated the federal Fair Credit Reporting Act by inaccurately reporting their driving behavior, including when they rode as passengers.

According to ​the ​complaint, Arity's tracking software was integrated ​into apps such as Fuel ‌Rewards, GasBuddy, Life360 and Allstate-owned Routely.

The judge also let drivers pursue claims under the laws of 20 U.S. states. He dismissed three of the drivers' 38 claims.

Insurers such as Allstate, Progressive and Berkshire Hathaway's Geico use so-called telematics in monitoring drivers' habits. They say the technology rewards ‌good driving through lower premiums.

Allstate argued that ​drivers never alleged it actually captured ​their data, or that their ​insurance rates went up. It also said its privacy ‌policies disclosed the possibility of data ​collection.

Neither Allstate nor ​its lawyers immediately responded to requests for comment on Wednesday. Lawyers for the plaintiffs did not immediately respond to similar requests.

The ​litigation combined 15 private ‌lawsuits against the Northbrook, Illinois-based insurer. Texas filed a similar ​lawsuit against Allstate in January 2025.

(Reporting by Jonathan Stempel in ​New York; Editing by Mark Porter)